Offices without bosses? Achievable, says book by IIM Prof

Through his book RethINC, Ram Mohan sounds a wake up call for corporate India, by highlighting some of the major problems staring it in the face and suggesting fixes for it.

According to him, the inability to harness employee talent, outsized executive pay, and ineffective boards have become all too pervasive today and threaten the very existence of companies.

He feels these ailments are symptoms of a fundamental flaw—the undemocratic character of companies.

Among other things, the book criticizes the concept of incentive pay to achieve targets, as well as the star culture that many organizations actively encourage.

Getting measurable results by dangling rewards in front of a favoured set of employees saves companies the trouble of asking the tough questions on why objectives are not being met, says the book.

And more often than not incentives are just a lazy response to the challenges of motivation and performance, it says.

In the chapter on organizations without bosses, the book cites the examples of Semco, WL Gore, Valve Corporation and Morning Star.

All these firms have managed to successfully implement the ‘bossless’ model and are hugely profitable even with a significantly large workforce. Brazil-based manufacturing firm Semco has done away with working hours, dress codes, rules, regulations and manuals. Workers determine their timings, and make a schedule that is convenient to all. Job rotation is mandatory every two to five years to prevent boredom.

At fabric maker WL Gore, every new worker is assigned a sponsor, who provides mentoring and not supervision. No employee is told what to do. Every employee decides what he would like to do and typically works on more than one project at a time.

At video games firm Valve, the handbook for new employees is titled ‘A fearless adventure in knowing what to do when non one’s there telling you what to do’

Here too, employees are encouraged to join projects after ‘asking themselves the right questions’.

At tomato processing firm Morning Star, employees can incur any expenditure they like towards meeting their performance objectives, but are accountable for them.

An excerpt from the book:

“In trying to run companies, we need to be realistic about what can be achieved and what cannot. Let me list the key features of the bossless model so that we understand that what we're talking about isn't in the realm of fantasy:

* A bossless organization doesn't mean a literal absence of bosses or managers. In none of the organizations that we've talked about are managers totally absent. The key differences with respect to the traditional corporate model are about how managers derive their authority and how they function.

In a bossless organization, managerial authority is derived from competence and acceptance amongst peers and those below. It's not handed over on a platter by a bigger manager sitting above.

The manager may be elected, as at Semco, or may be chosen from those nominated by peers as in the traditional IIM (A) model. Managerial authority may also be derived from one's ability to attract followers as at W.L. Gore or Morning Star.

A person gets a managerial role because people in the organization perceive him to be best suited for that role. Secondly, the manager operates not by ordering people around or by instilling fear in them, but through a degree of moral authority and persuasion. He takes an interest in the personal development of those below.

* Employees and managers are mutually accountable—everybody is accountable. However, accountability is not enforced by one person, but by a large circle of peers with whom one cooperates in getting a job done.

It's not that the manager simply demands the accountability of those below him. He, in turn, is accountable to them. He's not the only one measuring the performance of his team, all members of the team are measuring his too. The manager is evaluated not by those above him, but by those in his team.

* Hiring decisions involve a large number of people. When it comes to hiring, it's not the manager or a set of managers at a certain level who take the decisions. Hiring is highly collegial, with every member of the team or members of several teams being involved. Every effort is made to ensure that the person being considered will fit in with a very different sort of culture.

When these conditions are met in an organization, it takes the stress out of the workplace. Of course, the organization has to make profit. But profit is only a measure of how well a job is being done. It doesn't define the purpose of the organization. Profit comes naturally out of an environment in which people find opportunities for self-fulfillment.”